Skip to Main Content

Housing Prices Remain High, Biden Administration Looking to Cut Them Down

Over the past two years, Americans who are looking to purchase a home have been experiencing an extremely expensive housing market. These elevated prices are ultimately causing apartment and home sales across every U.S. city to decrease dramatically.  In New York, for example, the prices remain very high for renters and potential homeowners. New York is not the only state, however, as these soaring prices are prominent throughout the entire nation, which has caused President Biden to turn his attention to making these apartments and houses more affordable to Americans.

Bidens Proposal

According to the Biden Administration,  the president is largely focused on taking the necessary steps to ease constraints on the supply of new homes. There have been discussions regarding the trimming of mortgage costs for first-time and lower-income buyers. This is seen by the administration as a strategy that would give a chance to boost affordability for first-time buyers as the average prices of homes have skyrocketed to all-time highs. Currently, it is unclear how much of the premiums the Federal Housing Administration will cut for loans they insure.  Industry officials, however, are asking for cuts that will save new borrowers anywhere from $50 to $70 a month, but those numbers are considerably higher than what the FHA is considering.

An FHA borrower with a $300,000 loan and a 5% interest rate might pay $1,770 a month, including a continuing Federal Housing Administration insurance premium. If industry officials get the cuts that they asked the FHA for, the monthly cost of the loan could drop to about $1,700 a month.

State of NY Apartments

This past June, sales for Manhattan apartments plunged by nearly a third, as the red hot market began to cool off amid the recession rumors and declining stocks. Throughout the spring, the New York real estate market was performing extremely well, seeing both prices and sales trending upwards. The median sales price for the second quarter rose to a record $1.25 million, along with over 3,800 sales, the highest total for a second quarter since 2007.

“Throughout the second quarter, that slowdown has accelerated: fewer signed contracts, fewer bidding wars, more price reductions, and a gradual increase in available inventory,” Coldwell Banker Warburg President Frederick Warburg Peters wrote in a market report. “The gradually slowing sales market manifests in all boroughs and at all price points throughout the city.”

Wrap Up

Even though the demand for housing is cooling down for the summer, prices for a living remain extremely high, especially for new homeowners and renters looking for a new place. The Biden Administration has addressed the issue and hopefully, they can come to an agreement with the FHA in the coming months.

This entry was posted in Blog, News & Articles and tagged , , , , . Bookmark the permalink. Follow any comments here with the RSS feed for this post. Both comments and trackbacks are currently closed.